Malaysian Prime Minister Mahathir Mohamad has announced that the delayed Bakun project in Sarawak will be revived. Tim Sharpe reports
Banking on renewed vigorous economic growth, Malaysian Prime Minister Mahathir Mohamad used the World Renewable Energy Congress in Kuala Lumpar on 8 June to announce the revival of a scaled-down Bakun dam.
In its original form, the Bakun dam in east Malaysia would have generated 2400MW, the majority of which would be exported to peninsular Malaysia via an undersea transmission line some 400 miles in length. The new, smaller, project will have 500MW of installed capacity and will serve only Malaysia’s eastern states of Sarawak and Sabah. But, Mahathir said, the project will be more flexible in design, allowing for future upgrading if required.
Although the revised final design has not yet been completed, it is known that it will have an underground powerhouse which will use only one of the three planned diversion tunnels. This will mean the dam can be lower than in the original plan.
The remaining two tunnels, which are reported to be 70% complete, will be blocked, at least for the present time.
The original dam would have had 2400MW of installed capacity, but cutting size and service area means only 400 miles of overhead transmission and distribution lines will be required by the new project. Some 400 miles of undersea cable and another 285 miles of T&D lines on the peninsula are also not required. The cost of the revised project is now estimated at around US$1-1.5B, versus US$5B for the original plan.
Other areas which have been re-assessed at Bakun include resettlement. What has been described as an effective resettlement scheme is expected to be completed this September. Approximately US$0.25B (at current exchange rates) has already been spent on initial contract works and the resettlement of 15 longhouses.
Contractors for the new project have not yet been named but former project developer, Bakun Hydroelectric Corp (BHC), as well as its main shareholder. Ekran BHD will certainly not be involved. Into BHC’s place as project manager comes Bakun Hydro Sdn BHd (BHS), a joint venture between peninsular utility Tenaga Nasional Bhd (TNB) and Sarawak Electricity Supply Corp (SESCO). For the next two years BHS will be headed by just-retired TNB Engineers’ managing director Tajudin Ariff. BHS has already begun work on its own account to complete the third diversion tunnel.
The owner of the project in its revised form will be the Malaysian government, which will take possession as soon as it settles the question of compensation for BHC. It is anticipated that reaching agreement on compensation terms may be difficult: there is speculation that the government expects to pay around US$50M, versus Ekran’s claim of US$185M.
Prime Minister Mahathir said construction work for the new project could proceed as soon as negotiations with Ekran are complete. ‘Once the agreement is signed and the government takes over, we will think of inviting others to participate,’ he said after opening the World Renewable Energy Congress.
Financial details aside, Mahathir’s announcement represents a carefully timed public relations exercise that may have implications for Malaysia’s privatisation programme.
Malaysian power demand rose above pre-recession levels for the first time on 9 June, according to TNB figures, just one day after Mahathir’s announcement. Peak demand on that day hit 8680MW, compared with a previous high of 8317MW in March 1998, TNB announced on 14 June.
The country’s total installed capacity is now around 12,500MW, giving a reserve margin of over 30%, but this would soon be absorbed in the event of a rapid economic recovery. It is now considered fairly likely by some that such a rapid economic recovery will occur. Malaysia is expected to achieve up to 2% positive GDP growth in 1999, versus respected financial organisation’s earlier growth estimates for the year of between 0.5% and 0.9%. In some more optimistic quarters, the year 2000 is expected to bring full recovery.
Pushing ahead with a major hydro power project for the still largely rural areas of Sarawak and Sabah underlines Malaysia’s commitment to its four fuel policy — national reliance on a fairly even split between gas, oil, coal and hydro as the country’s primary energy sources for power.
Unhappily, the policy is inconsistent with privatisation. Gas, for instance, is far cheaper, cleaner and easier to bring on line than coal, and is therefore most often the fuel of choice for private power producers. Yet site preparation began in July for a 2100MW coal-fired plant at Lumut on the peninsula’s western coast, for state-owned generator TNB, even as planning for a fully privatised power market continues. Other large coal-fired plants are also being considered.
Admittedly hydro’s characteristics offer Malaysia a long-term stable energy source, but does the country need a scaled down Bakun project for remote load centres just now? Yes, Prime Minister Mahathir has decided. Let’s get something up and running, he says, if only to capitalise on the work already done and maintain fuel diversity. Then we can see what’s what.